The official Y Combinator SAFE, not the translation, decides the Brazilian founder's cap table

The document that replaced the priced round in early-stage

The SAFE (Simple Agreement for Future Equity) was created at Y Combinator by Carolynn Levy in 2013 and became the standard instrument for raising money before a priced round: the investor puts in money now and receives the right to shares later, with no interest and no maturity date, automatically converting into preferred shares when the startup does an equity financing. It's not debt, it's not equity until conversion, and according to YC's own documents material, the only term that's usually actually negotiated is the valuation cap. Since 2018, YC has standardized the post-money version of the SAFE, in which the cap already bakes in the SAFE's own money (but not the money from the priced round that comes later, nor a new option pool created in that round).

For a Brazilian founder negotiating with a US fund, the central point isn't philosophical: it's that this English-language text, hosted on YC's Startup Documents page, is the contract that actually holds. A translated version for internal use, or a Portuguese summary for the board, has no effect whatsoever on the cap table if the instrument signed is the original SAFE.

The cap math, with the numbers YC uses

YC's materials spell out the calculation directly: ownership sold equals the amount invested divided by the cap. Example given by YC itself: a $1 million raise selling 15% ownership implies a post-money cap of $1 million ÷ 15% = approximately $6.7 million (that is, $5.7 million pre-money). Raising less at the same cap sells less of the company: $500,000 equals roughly 7.5%, $800,000 roughly 12%. It's also possible to stack different caps in the same round: $500,000 at a $5.5 million cap (~9%) plus $500,000 at an $8.3 million cap (~6%) add up to the same ~15% sold.

This is the kind of math any founder should run before accepting a cap suggested by the investor, and YC provides its own calculator for that. The detail that often gets overlooked: if the subsequent equity financing values the company above the cap, the investor converts at the cap (the lower number), not at the new round's valuation. It's exactly this design that rewards whoever came in early, and it's also why negotiating the cap down has a direct dilution cost later on.

MFN: the clause that delays the decision, but has a date trap

A SAFE with MFN (Most Favored Nation) has no cap or discount set: it automatically inherits the best terms of any SAFE issued later by the same startup. This lets an investor come in early without forcing the founder to fix a valuation yet. The technical point that YC's documentation makes explicit, and that tends to catch unwary founders off guard: the date that counts for MFN is the later of the SAFE's signature date and the wire's receipt date, not the date the document was sent. In practice, this means closing (signing and receiving the money for) the SAFEs with a defined cap before issuing the uncapped MFN one; whoever signs last on paper controls the date, and therefore which future terms will get "pulled in" by the MFN.

For anyone structuring a bridge round with multiple investors and different formats, this signing order isn't a minor legal detail: get the sequence wrong and the MFN can end up inheriting a higher cap (worse for the investor) or a lower one (worse for the founder) than planned.

What's missing from the package for those in Brazil

YC's documents page lists three post-money SAFE forms for US companies (with cap, with discount, and the "uncapped MFN" version), plus an optional pro rata side letter. Outside the US, there are valuation-cap versions for companies incorporated in Canada, the Cayman Islands, and Singapore, each with explicit guidance to consult a lawyer licensed in the corresponding jurisdiction before using it. There is no form for a company incorporated in Brazil.

The "Send a SAFE" tool, which generates, signs, and sends the document in about two minutes and which YC describes as "agent-friendly" (it can be run via command line, installing the YC CLI with curl -fsSL https://bookface.ycombinator.com/cli/install.sh | bash and operating with commands like yc safes create, yc safes update, and yc safes send), currently only supports companies incorporated in the United States. A startup formed in another jurisdiction without its own form needs to find a local lawyer to adapt the instrument, outside the automated flow.

The practical implication is direct: to raise via SAFE from a US fund within the structure that fund already knows and operates (including with agent tooling), the company usually needs to have, or set up, an entity in one of the covered jurisdictions, which in practice usually means Delaware or Cayman. This isn't an aesthetic choice about corporate structure: it's what makes the SAFE's own text, and the automatic conversion it promises, work as intended.

The counterpoint: can the terms be replicated in a local instrument?

The counterargument is reasonable: why not use a convertible note governed by Brazilian law, mirroring cap, discount, and MFN, and avoid the cost of setting up and maintaining a US entity? For fundraising with local angels and funds, this practice is already common and works. The problem shows up when the other side of the table is a US fund used to the original SAFE: the value of YC's instrument lies in being standard, simple, and predictable for those who already process dozens of these contracts a year, with automatic conversion guaranteed by the same corporate law that governs most of global venture capital. An instrument mirrored under Brazilian law reintroduces exactly the legal friction (clause-by-clause negotiation, conversion uncertainty, lawyer costs in two countries) that the SAFE was created to eliminate. In practice, sizable US funds tend to prefer waiting for the founder to set up the right entity rather than accepting a local version, even one technically equivalent on paper.

What changes for whoever decides the fundraise

For a Brazilian founder targeting a US fund, the decision on corporate structure (which jurisdiction the holding company will be in) needs to come before the cap negotiation, not after: it's that structure that determines whether YC's standard SAFE can be used without a legal workaround. Once the jurisdiction is set, the only point actually open to negotiation, according to YC's own documentation, is the valuation cap; pro rata rights stay out of the SAFE's body, in a separate side letter, and YC itself recommends using check size as the criterion (a $500,000 investor has a stronger case for pro rata than a $10,000 one). It's also worth remembering that the investor needs to be an accredited investor and that issuing any SAFE requires board approval, two requirements that don't disappear just because the founder is Brazilian.